Reports that the next round of US tariffs on Chinese products would be milder than expected has not dented Taiwanese companies’ intention to divert their investments from China, the Ministry of Economic Affairs (MOEA) said yesterday.
The US is planning tariffs of about 10 percent on nearly US$200 billion of Chinese goods, down from 25 percent announced early last month, the Wall Street Journal reported on Saturday.
If true, the milder tariffs could mitigate the trade war’s effects on Taiwanese companies in China and might dampen their motivation move investments back home or to the countries targeted by the government’s New Southbound Policy.
The 20 companies that have announced plans to return to Taiwan are not likely to drop their plans, which were made with deliberation, Minister of Economic Affairs Shen Jong-chin (沈榮津) told a news conference in Taipei.
The companies operate in the electronics, information communication technologies and bicycle industries, Shen said last week, adding that the ministry has begun efforts to facilitate their return.
“Ultimately, it is up to the companies,” Shen said, adding that those making higher-tiered products are more resilient to tariff hikes.
“Some would not be able to absorb even a 10 percent increase, while others could withstand 25 percent,” he said, “I expect them to stay the course, as they have explored all possible tariff outcomes.”
The ministry still needs to help the firm cope with the “five industrial shortages” — power, water, land, talent and workers, Shen said.
Apart from the tariffs, profitability of Taiwanese firms in China is under pressure from rising labor costs, he said last week.
As market conditions in China worsen, the ministry would help firms to undergo a transition or relocate to New Southbound Policy countries, he added.
Meanwhile, a US delegation headed by Acting Assistant US Trade Representative for China Affairs Terrence McCartin has affirmed Taiwan’s efforts at securing tariff exemptions on aluminum and steel exports, Shen said yesterday.
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